Microsoft's Tatarinov: no-one serious is doing cloud ERP!

No-one 's doing cloud ERP! Or no-one serious at any rate. That's according to Kirill Tatarinov, EVP for Microsoft Business Solutions, was in town Tuesday and I grabbed the chance to sit down with for a chat about CRM, clouds and the NSA scandal.

No-one 's doing cloud ERP!

Or no-one serious at any rate.

That's according to Kirill Tatarinov, EVP for Microsoft Business Solutions, who was in London Tuesday when I grabbed the chance to sit down with him for a chat.

Microsoft this week upped its CRM game with the announcement of new capabilities for marketing automation, customer support and social media monitoring, fuelled by the firm’s acquisitions of Parature, MarketingPilot and NetBreeze.

You can read the marketing blah blah here so we shan't linger on the details of that, other than to note that the emphasis on marketing and socialisation aligns the Microsoft cloud CRM offering up increasingly blow-for-blow against Salesforce.com's agenda.

Elsewhere, some of the highlights of our chat were:

The rise of the line of business exec as the IT powerbroker

“We certainly see line of business executives enjoy much more of a significant role in technology buying decisions. There are a number of factors in this. Consumerisation of the enterprise is one of them. The desire to move fast and drive towards faster outcomes is another as is the ability to do all this from the cloud. These are all important factors.

“But we are seeing line of business experts playing an increasingly important part. The level of engagement has shifted. Most meetings that I’ve had in London over the past two days were attended either by a business person and an IT person or just the business person. From personal experience, if you compared that to five years ago, on the same visit it would be almost exclusively IT people.

“When you look at the line of business executives, then it is the marketing people who spend the most money. You need to get your image out there and your brand out there. In the modern internet world, your competitors are just a click and few seconds away so you need to nurture your brand more. Marketing budgets have grown, but most people don’t have the good tools needed to measure return on that.”

On the need to close the loop between reaction and engagement online:

“We have roadmap and the next logical step on that path is to close the loop and automate engagement. That’s precisely where we’re taking the product.

“Essentially in at 80% of cases you already know - or your organization should know - what is going on. Most tweets are reactive. You can automatically respond and say that you’re experiencing an issue that will be fixed in ten minutes or an hour.

“We are on a path to do something significant every six months. It’s near term.”

On why people still buy on premise CRM:

“Two out of three new CRM customers go to the cloud. But larger ones go on premise. There are still premise CRM buyers such as financial services organisations. They buy it and they put it in their data centers. Most of them have spare data center capacity.

“For the end user, it’s completely transparent but the organisation sleeps better because they know it’s under their control. Many large companies prefer to take a private cloud approach. We give them that option.”

On why you don’t need to stress about deployment models:

“There is one very large organization that I spent a good chunk of time with last month. In all the discussions we’ve had, we haven’t even talked about the mode of deployment. We’ve given them the assurance that it will run on the Microsoft cloud and that they can put it in their data center.

"For them in the end it will be a business decision. Is it based on capex or opex? Do they manage it or do we? People get carried away by the mode of deployment and that’s the wrong thing to do.”

On why no-one does cloud ERP (apparently):

“No-one has done cloud ERP!

“Point me at a serious organisation that runs end-to-end ERP in the cloud. NetSuite is not at scale, none of these guys are at scale.

“This is a case where I agree with the aggregate view of the analysts. Roughly 25% of ERP RFPs have cloud mentioned in them. Whether they end up going to the cloud is another matter altogether. There are broad range of reasons, ranging from privacy and availability to service level agreements.

“It’s slightly different in the SMB market where it’s not so much about ERP as accounting. There are a number of cloud players who are successful there and we have a successful set of partners who deliver Dynamics in the cloud.

“What we announced a couple of years ago was that the next major release of AX will be available from the public cloud running on Azure. So in 2015 the next major release of Dynamics AX will be available as end-to-end public cloud ERP. We are going to be the first.

“People [ERP vendors] - I won’t name them - rush to put cloud on their banner. But they are not effective.”

On why cloud vendors who claim the NSA scandal isn’t hurting them aren’t telling the truth:

“They are wrong.

“I can point to a number of clients in Europe who get concerned about data privacy in the current environment.

“Some of our prospects were looking at cloud solutions. As these news cycles escalated they chose to go on premise instead.

“People are waking up to the reality which is that you need to be very disciplined with managing data whether it’s in the cloud or on premise.”

Verdict

Enhanced marketing functionality and social listening to the fore - ticks in the ‘must have’ boxes for Microsoft’s CRM that enable it to maintain a steely gaze in the direction of Salesforce.com and Oracle.

Those cloud ERP comments aren’t going to win any plaudits in certain vendor circles - but then that’s not Tatarinov’s job, is it? I suspect we shall return swiftly to this topic.

But no-one's doing cloud ERP? The key word here is “serious” as in “serious organisation” and that's a hugely subjective term that wasn’t defined in a quantifiable fashion. So if you’re out there deploying cloud ERP, I’ll have to leave it up to you for now to decide whether you’re suitably serious...

But I do have to applaud Tatarinov's candor on the NSA front. Those who still maintain it’s having no long term damaging impact on cloud prospects outside of the US are, I fear, kidding themselves.

Disclosure: at time of writing, FinancialForce, Oracle and Salesforce.com are premium partners of diginomica.